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PMP Exam Prep Seminar

Participant Workbook

Published by
Instructing.com, LLC

For 35-contact hours of project management


education, PDUs, or on-site training please visit:
www.instructing.com.

©2016 Instructing.com, LLC. Instructing.com, LLC has been reviewed and approved as a provider of project
management training by the Project Management Institute (PMI). As a PMI Registered Education Provider
(R.E.P.), Instructing.com, LLC has agreed to abide by PMI-established quality assurance criteria. “PMP,” “PMBOK
Guide” “CAPM,” “PgMP,” “PMI,” “PMI-SP,” “PMI-RMP”, “PMI-PBA”, “PMI-ACP,” and “PMI-Agile Certified
Practitioner” are registered marks of the Project Management Institute, Inc.

Updated October 9, 2016; Version 5.1 1


This PMP Exam Prep Workbook will walk you through the entire PMBOK Guide, fifth edition and all of the PMP
Exam objectives. Throughout the book you’ll see PMBOK numbering references in the slide headlines. You
will also see an occasional activity to perform. If you’re in a study group or self-led training endeavor use this
workbook to organize your notes as you prepare to pass. Make certain you’re familiar with everything in this book
- including the PMP Memory Sheets provided as the last several pages.

If you need your 35 contact hours of education visit us at www.instructing.com. We offer a 35-hour PMP Exam
Prep seminar online. And since you’ve purchased this book use the code PMPWBOOK to save $50 on the 35-
hour course.

If you’ve questions or comments please contact us: cs@instructing.com. Thanks! All the best in your projects.

Always check with PMI for complete exam details:

http://www.pmi.org/certifications/types/project-management-pmp

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Learning is hard work, but your goal is to work smart, not just hard. The PMP exam is founded on the Project
Management Institute (PMI) book, A Guide to the Project Management Body of Knowledge, fifth edition (hereafter referred
to as the PMBOK Guide). If you want to pass the PMP exam, you’ll first need to qualify for the exam and then
create a plan on how to pass the test. Let’s get that part straight right away – your goal is pass the test. Your goal
isn’t to take the test. Your goal isn’t to get a perfect score. Your goal is to simply pass the test.

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In order to pass the test you’ll basically need to answer 106 questions correctly out of 175. Wait a minute! The
PMP exam, as everyone knows, has 200 questions – not 175 questions. Correct! But, the PMP exam has 25 seeded
questions, which PMI calls pre-test questions. These questions aren’t pre-test for you; they are pre-test questions
that haven’t yet been added to the possible pool of PMP questions.

Based on how PMP candidates answer these questions, PMI will judge if the questions are too easy, too hard,
or just ridiculous enough to be added to the pool of questions for future exam takers. On your test these seeded
questions are sprinkled among the 175 questions that do count towards your passing score. You won’t know if
you’re answering a pre-test question or a live question so you have to answer all of the questions with the same
intensity.

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If you’ve not yet completed your PMP application on PMI’s website do it now. It’s not a quick application and can
take some time to get approved by PMI. Let them work on the approval process while you’re preparing to pass.
No need to do a month’s of preparation only to come to a grinding halt to fill out the exam application. Once
your application has been approved you will immediately, yes, immediately schedule your exam. Create a deadline
to work towards.

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If you’ve not yet completed your PMP application on PMI’s website, do it now. It’s not a quick application and
can take some time to get approved by PMI. Let them work on the approval process while you’re preparing to
pass. No need to do a month of study only to come to a grinding halt to fill out the exam application.

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You have to pass the exam within one year of being approved, but you won’t need anywhere need that much
time. For what it’s worth, I know several project managers who went through the process and chickened out and
never scheduled their exam. Procrastination will kill you on this effort. You’re going to pass the PMP exam; set a
deadline and make it happen.

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You’ll also need a place to study. This means somewhere quiet, uninterrupted, clean, and well-lit. If you’re
lucky enough to have a home office, there you go. I’ve worked other PMPs who didn’t have that luxury so they
commandeered an after-work conference room, space in a library, and I know of more than one PMP who
hunkered down in a rented cabin for a week to study and be unreachable. Find a solution that works for you – but
you’ll need a PMP Exam Study Headquarters. Clean, well-lit, distraction-free are all ways to describe your exam
headquarters.

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Whatever schedule you create you must adhere to. No, you can’t study later. No, you can’t browse Reddit for
pictures of kittens. No, you can’t watch your favorite episode of Matlock. If you want to pass the test you must
create and stick to the schedule. Study everyday at the same time. I recommend you study at the same time for
when you’ve schedule your exam – might as well get your brain in PMP mode.

How long to study? One hour to four hours at a time if you’re doing a monthly schedule. If you’re taking the two-
week approach you’ll dig in and immerse yourself in the materials. Alternate four hours to six hours one day, and
then break up the next day with smaller segments of review.

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I’m often asked how long should it take to pass the PMP? Well, technically you only have four hours to pass the
test, but you can prepare to pass the PMP in four weeks. Four weeks?! Absolutely!

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“Success means doing the best we
can with what we have. Success is
the doing, not the getting; in the
trying, not the triumph. Success is a
personal standard, reaching for the
highest that is in us, becoming all
that we can be.”
– Zig Ziglar

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There’s much concern and some confusion regarding the PMP exam application. Some folks will tell you that if
you’re “real careful” with your wording you won’t get audited. Other people tell you that’s it order of your projects
that affect the audit outcome. The truth is, as I explain in this lecture, the audit selection process is actually totally
random. There’s nothing you can do to totally avoid an audit of your application.

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Contact hours and PDUs are not the same thing! You get contact hours before you are a PMP. Once you’re a
PMP, then you can earn PDUs... this lecture explains the difference.

This lecture also explains the new PMI Talent Triangle and how your PDUs are distributed among technology,
leadership, and business.

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Right now you don’t have to worry too much about the PMI Talent Triangle. After you pass the PMP, however,
you’ll be more concerned with your PDUs and the Talent Triangle.

Basically, once you’re a PMP you have to distribute your PDUs earned in leadership, business and strategic
management, and technical PDUs for a minimum of 35 educational PDUs. You can get all of your PDUs from
classes and seminars, but you’ll need to have 35 of the PDUs distributed as in the above slide. In other words, you
can’t claim 60 PDUs only from technical project management.

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“There are two types of people
who will tell you that you cannot
make a difference in this world:
those who are afraid to try and
those who are afraid you will
succeed.”
– Ray Goforth

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If you’re taking this course as part of Instructing.com’s online learning, then the next few pages will make perfect
sense to you.

If you’re using this book as a study-aid or in a study group these next few “slides” won’t mean much to you.

If you’re using this book in an instructor-led PMP Exam Prep Seminar your instructor will explain how best to
participate in your course.

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It’s been said that repetition is the mother of learning. These PMP Exam Prep Flashcards will help you learn all
of the project management terms - and that’ll make passing the PMP Exam even easier. There are three sets of
flashcards included:

One term per page - great for studying flashcards on your phone

Two terms per page - great for printing or viewing on a tablet computer

Three terms per page - ideal for printing all of the terms to study unplugged

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These PMP Memory Sheets include everything you must know for your PMI exam. Inside this lecture and
document you’ll find secrets to help you pass the PMP exam. This document includes details on these key PMP
Exam topics:

• Project integration management


• Tips for finding float
• Schedule management for all projects
• Project cost estimating and budgeting
• Earned value management formulas
• Quality control and quality assurance
• Human resources on the project team
• Communication terms you must know for your PMP exam
• How to identify, analyze, and respond to project risks
• Following the procurement processes
• Stakeholder management tips and secrets
• All of the PMP processes in knowledge areas and in process groups

The exam memory sheets are part of this workbook. The memory sheets are the final pages of this workbook.

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Yes, you need to study the PMBOK Guide, for your exam. If you’ve selected some other materials to help you
along the PMBOK Guide can serve as a good reference point for your materials. If you’re reading the PMBOK
Guide straight-up, well, it’s pretty boring. It reads like a toaster manual and isn’t always easy to comprehend.

The PMBOK Guide, however, is what your exam is based upon, so I do recommend you have a copy on hand.
Within the PMBOK Guide you’ll need to know all that you can about the project management processes. This isn’t
just memorizing the 47 project management processes, but rather understanding how to apply the processes in a
given scenario.

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The application of the processes often trips up would-be PMPs. For example, if you never get the chance to
procure anything in your projects because all of the vendor management is handled outside of the project, then
the procurement chapter may be real tough for you. The same is true with any of the different processes. While
you personally may not have experience with all 47 project management processes, you must understand how all
of the processes work in a project. This is why the preparation is tricky and takes time and effort.

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Did you know that if you join PMI you can access an electronic copy of the PMBOK Guide? It’s true! So, if you
want to manage your funds, considering the cost of the exam, you could join PMI, save a bit on your exam fee
and access the PMBOK Guide as a PDF document.

I actually prefer the electronic version because I can use the search feature to find keywords for questions, review,
and geeky project management trivia.

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There are eight initiating tasks for the 2016 PMP exam. Initiating accounts for 13 percent of the PMP exam and
has two new tasks for the exam.

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“Things may come to those who
wait, but only the things left by
those who hustle.”
– Abraham Lincoln

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The PMP exam domain Planning accounts for 24 percent of the PMP exam. There are 13 planning tasks covered
in this domain. There is only one new task in this domain.

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“Never limit yourself because
of others’ limited imagination;
never limit others because of
your own limited imagination.”
– Mae Jemison

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The PMP exam domain of Executing accounts for 31 percent of the PMP exam. There are seven executing tasks
covered in this domain, two of which are new tasks.

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“Success does not consist in never
making mistakes but in never
making the same one a second
time.”
– George Bernard Shaw

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The Monitoring and Controlling PMP Exam domain accounts for 25 percent of the exam. There are seven
monitoring and controlling tasks in this domain - two of which are new.

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“Success means having the
courage, the determination, and
the will to become the person you
believe you were meant to be.”
– George Sheehan

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The 2016 PMP exam domain of closing accounts for seven percent of the PMP exam domain and has seven
closing tasks. No new tasks have been added to this domain.

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In order to be a project manager you need to understand what a project is, what a project manager does, and how
your personality can help you be a better project manager. Consider:
• The difference between projects and operations
• Management skills you’ll need
• Using your personality

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A project is a temporary undertaking to create something unique – think of a new product, a new service, or
even a new condition in your organization. Two interesting words in that last sentence when it comes to projects:
temporary and unique. Temporary, of course, means that it won’t last forever. The reason I’m stressing temporary
is that’s one of the first realizations of a project versus an operation. Consider the manufacturing of a new car –
that’s, for all practical purposes, an on-going operation. The design and creation of the car to be manufactured,
however, is a project. It has a clear beginning and a clear ending. Projects do not last forever (they may feel that
they do), but have a definite beginning and a definite end.

The second word is unique. A project creates something that has never, ever, been created before. You say, “Slow
down there, professor. I’ve managed lots of projects that have created the same thing over and over.” That’s
probably true to some extent: a construction company may build the same model home over and over. An IT
consulting firm may install the same piece of software over and over. And even a cake designer may create the
same type of cake over and over. The point is every one of those homes, software installs, and yummy cakes are
unique.

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Project management begins with an idea – and usually not the project manager’s idea – of something that needs
to be done, created, removed, or invented. The idea itself usually comes from a stakeholder. You might know your
stakeholders as management, customers, or end users. A stakeholder is simply a person that has a vested interest
in the outcome of your project. Technically speaking, the idea is really about the product that your project will be
creating.

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Chances are projects within your organization are of the same nature. What I mean by that is that you and your
fellow project managers are probably managing projects that have something in common: you are all managing
IT projects, managing health care projects, construction projects, and so on. The industry that you work in is the
application area and your projects happen within that application area.

Your projects likely also have something else in common – they exist to support something more than just the
project. Your projects exist to help your organization, your company, your community, increase revenue, decrease
costs, improve a condition, or support an idea or service. Projects, for all intensive purposes, serve some greater
good.

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Not every performing organization has a project management office, but the PMO is a stakeholder if one exists.
A PMO is a centralized business unit that oversees all project management activities within an organization,
company, or even a department. PMOs are to assist the project managers with scheduling, resource management,
training, and more. They are fine people.

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You’ll be tested on the role of the project manager, the stakeholder-project manager relationships, and how
projects operate in organizations. Stakeholder management is a new knowledge area in the PMBOK Guide, fifth
edition, so you can expect many questions on stakeholder management throughout the exam.

• Working with senior project managers


• Working with programs
• Working with a project management office
• Using enterprise environmental factors

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So where does that put you? Are you a brand new project manager looking for the path of least resistance to
project success? Are you a project manager by default looking for the way projects should be perfectly managed
in an imperfect world? Or are you a seasoned project manager looking for better approaches, new ideas, or
clarifications of project management terms and processes?

Wherever you’re coming from, whatever your reason for reading, welcome. I won’t pull any punches. I’m going to
tell you the way projects should operate, the processes that projects can use – not must use. In this guide I’ll detail
all of the project management processes that you’re likely to use at some point in your life as a project manager.
In this guide I’ll detail all of the project management processes that you can use to move your project from right
now to some point in the future. I’ll offer real world, practical advice on managing your project quickly, accurately,
and with precision.

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“I cannot give you the formula
for success, but I can give you the
formula for failure which is: Try
to please everybody.”
– Herbert B. Swope

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Stakeholders can influence how smoothly your project operates. Depending on the structure your project is
operating in you will manage and influence the stakeholders differently. It’s important for the PMP exam to
recognize the different organizational types and how the project manager may operate within each structure.

The PMP exam will test your understanding of how project managers get things done in different types of
organizations.

• Influencing the organization


• How organizations operate
• Considering the organizational structure

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While people complete projects, projects are done within organizations. These organizations, not-for-profit or
otherwise, have cultures, styles, and values that affect how the project is managed and eventually completed.

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The people interested in the outcome of your project are called stakeholders. These folks vary in their influence
over the project from casual observer to the guy calling the shots and signing the checks. Stakeholders always fall
into one of three categories:
• Positive stakeholders – The people that are happy your project is happening and want the project to be
successful.
• Negative stakeholders – The grumps/grouches that hate your project and hope that it (and maybe even
you) go away and had never existed. In other words, they don’t like your project.
• Neutral stakeholders – The individuals that are involved or affected by your project, but don’t care if it
succeeds or fails. Inspectors are good examples of neutral stakeholders.

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Project stakeholders can be affected by the project life cycle. The project life cycle is unique to each project and is
different from the project management life cycle. This lecture covers:

• Project stakeholders influence


• Project stakeholders and their contributions
• Project life cycle characteristics

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A project life cycle is the progression of the project phases from the first phase all the way through the final
project phase. Project life cycles are unique to application areas. You probably won’t have too many foundation
phases in health care or in IT. You would, of course, have phases that are logical to the application area you’re
working in – and that are unique to the project that you’re managing.

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Phases can be called lots of things. Some organizations call phases stages. Other companies call phases a work
unit. And your company may have an entirely different set of nomenclature for phases like just the name of the
work that’s happening in that phase. It’s not big deal what terminology you want to assign to a phase – it’s the
concept that’s important. A phase is a portion of the project that creates a deliverable and allows the next phase
to begin.

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“Love yourself first and
everything else falls into line. You
really have to love yourself to get
anything done in this world.”
– Lucille Ball

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There are 47 project management processes that a project manager and the project team use to move a project
along. The goal of these processes is to have a successful project, but a project’s success is based on more than
just leveraging these processes. A successful project depends on five things:

• Using the appropriate processes at the appropriate times


• Following a defined project management approach for execution and project control
• Developing and implementing a solid project management plan that addresses all areas of the project
• Conforming the project and the project management approach to the customer requirements
• Balancing the project time, cost, scope, quality, resources, and risks while meeting the project objectives

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The project manager is assigned during initiation, and the inputs from the original project initiator and/or the
project sponsor are considered throughout the initiation processes. Project initiation is, of course, the first process
that kicks off the project. This exam-essential information includes:

• Getting the project initiated


• Developing the project charter
• Identifying the project stakeholders

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Projects fail at the beginning and not the end. A project needs effective planning, or it will be doomed. The
whole point of the planning process group is to develop the project management plan. The good news is that the
entire project plan doesn’t have to happen in one session; in fact, planning is an iterative process, and the project
manager and the project team return to the planning phase as needed to allow the project to move forward.
Planning is key to project, and PMP, success. This lecture introduces:

Developing the project management plan Estimating the project costs


Planning the project scope Planning the project budget
Collecting project requirements Planning for quality
Defining the project scope Completing human resources planning
Creating the Work Breakdown Structure Planning for project communications
Planning for schedule management Planning the project risks
Defining the project activities Identifying the project risks
Sequencing the project activities Performing qualitative risk analysis
Estimating the activity resources Performing quantitative risk analysis
Estimating the activity duration Planning for risk responses
Developing the project schedule Planning procurement management
Planning project cost management Planning stakeholder management

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The executing processes allow the project work to be performed. They include the execution of the project plan,
the execution of vendor management, and the management of the project implementation. The project manager
works closely with the project team in this process group to ensure that the work is being completed and that the
work results are of quality. The project manager also works with vendors to ensure that their procured work is
complete, of quality, and meets the obligations of the contracts. The executing processes are all about getting the
project work done. This lecture covers:

• Directing and managing project execution


• Performing quality assurance
• Acquiring the project team
• Developing the project team
• Managing the project team
• Managing project communications
• Conducting project procurements
• Managing stakeholder engagement

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This process group focuses on monitoring the project work for variances, changes, and discrepancies so that
corrective action can be used to ensure that the project continues to move toward its successful completion. This
means lots of measuring, inspecting, and communicating with the project team to ensure that the project plan
is followed, variances to the plan are reported, and responses can be expedited. While the project team does the
work the project manager monitors and controls the work. This lecture details:

• Monitoring and controlling the project work


• Managing integrated change control
• Validating the project scope
• Controlling the project scope
• Controlling the project schedule
• Controlling the project costs
• Performing quality control
• Controlling communications
• Monitoring and controlling project risk
• Controlling project procurements
• Controlling stakeholder engagements

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“The successful man is the one
who finds out what is the matter
with his business before his
competitors do.”
– Roy L. Smith

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This process group focuses on monitoring the project work for variances, changes, and discrepancies so that
corrective action can be used to ensure that the project continues to move toward its successful completion. This
means lots of measuring, inspecting, and communicating with the project team to ensure that the project plan is
followed, variances to the plan are reported, and responses can be expedited. Closing process include:

• Closing the project


• Closing procurement

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Preparing to create the charter is often trickier than actually writing it. However, before the project management
team can actually create a charter, there needs to be a project. This means the organization, the project steering
committee, or the project portfolio management team needs to choose a project to initiate. There are reasons why
some projects are selected and others are not. This lecture will explore:

• Why projects are selected by organizations


• Benefit measurement methods for project selection
• Time value of money
• Introduction to constrained optimization selection methods

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Activity: Mary says her project needs $650,500 to complete and the project will last three years. If the rate of
return is six percent what’s the future value of Mary’s project?

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Activity: Thomas promises that his project will be worth $1,500,000 in four years. If the rate of return is six
percent what’s the present value of this project?

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While future value and present value do show the time value of money they both have one distinct disadvantage:
they don’t account for monies earned while the project is in motion. While many projects, like construction for
example, don’t realize a return on investment until the project is completed, other projects, like IT, retail, and
healthcare, realize return on investment in phases.

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The project charter, as a final reminder for your exam, is endorsed by an entity outside of the project boundaries.
This person or entity has the power to authorize the project and grant the project manager the power to assign
resources to the project work. The project charter should define the business needs and what the project aims to
create in order to solve those business needs. You’ll need to know how project charters are written. This includes:

• Project statement of work


• Business cases
• Using expert judgment
• Identifying the contents of the project charter

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The project charter authorizes the project. This document launches the project and gives the project manager
the authority to use organizational monies and resources to reach the objectives of the project. It’s a powerful
document, and without one of these you’re setting yourself (and often your project) up for failure.

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One of my favorite project management axioms is that projects fail at the beginning not the end. Show me a
project management team that doesn’t take time to plan, and I’ll show you a project management team that
struggles to finish their projects on time, on scope, and on budget. It’s not much fun for anyone involved in the
project when projects crash and burn due to avoidable mistakes. Planning is paramount.

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“You have to learn the rules of
the game. And then you have to
play better than anyone else.”
– Albert Einstein

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So when does a project manager and the project team do planning? In theory planning comes right after initiating
and before executing. In reality, planning overlaps initiating just a bit and extends deep into the project’s execution.
Planning is full of iterative processes that demand the project manager and the project team to revisit them early
and often. Planning ends when the project work is done and the final project process group – closing – begins.

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Here’s a list of the typical project documents: Project statement of work
Activity attributes Quality checklists
Activity cost estimates Project schedule network diagrams
Activity duration estimates Project staff assignments
Activity list Requirements documentation
Activity resource requirements Requirements traceability matrix
Agreements Quality control measurements
Basis of estimates Quality metrics
Change log Risk register
Change requests Schedule data
Forecasts (costs, schedule) Resource breakdown structure
Procurement documents Resource calendars
Procurement statement of work Stakeholder register
Issue log Team performance assessments
Milestone list Seller proposals
Project funding requirements Source selection criteria
Project schedule Work performance reports
Project calendars Work performance data
Project charter Work performance information

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The product of the project is created during these execution processes. The largest percentage of the project
budget will be spent during project execution. The project manager and the project team must work together to
orchestrate the timing and integration of all the project’s moving parts. A flaw in one area of the execution can
have ramifications in cost and additional risk, and can cause additional flaws in other areas of the project. Once
you have a plan you’ll execute it. This lecture covers:

• Executing the project work


• Directing the project team
• Examining the project deliverables
• Applying project actions

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The project planning is iterative while the project execution – you hope – happens just once. In other words, you
want the project work to be done correctly the first time. Executing the project is where the bulk of the project’s
time and monies are consumed. It’s in this process group that you’re spending the project budget on materials and
labor.

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As soon as a project begins, the project management monitoring and controlling processes also begin. These
processes monitor all the other processes within the project to ensure they are being done according to plan,
according to the performing organization’s practices, and to ensure that a limited number of defects enters the
project.

• Examining project performance


• Tracking and monitoring project risks
• Maintaining product information
• Forecasting the project’s success
• Monitoring approved changes

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Wouldn’t it be great if you and your project team could just create the project management plan, and then the
project team would just go do the project work? You could spend your mornings sleeping in and your afternoons
on the golf course. Of course, if that were the case there’d be no reasons to have a project manager. Projects, like
most things in life, require a constant monitoring and controlling.

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Changes can affect all areas of the project. Consider a change in the project scope and how it could affect
the project budget, schedule, quality, human resources, communications, risks, procurement and even other
stakeholders.

• Using change control tools


• Examining integrated change control
• Applying configuration management

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Every change that enters the project must pass through this change control process. If not – lookout! There’s a
good chance that problems are lurking just below the surface in that project. Examples include unchecked risks,
cost overruns, missed deadlines, and frustrations from the project team, the project customers, and management.
Trouble abounds.

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Every project manager that I know loves to close a project. There’s something rewarding about completing a
project and then transferring the deliverable to the customer or project user. I’ve also learned from participant
feedback in my PMP Exam Prep seminars that this topic is the category where exam candidates missed the most
questions on their way to their PMP certification. I believe it’s because folks have a tendency to study in the order
of the process groups: initiation, planning, executing, monitoring and controlling, and then (finally) closing. I
imagine they’re winded by the time their studying efforts get to closing. With that in mind, really home in on this
closing discussion. I want you to pass your exam!

• Performing administrative closure


• Closing the project contracts
• Closing the project
• Update the organizational process assets

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The two most exciting days in a project manager’s life is when a project is first started and when it’s ending.
Okay, so that may be a slight exaggeration, but there really is something exciting about closing a project. You, the
project manager, know that the work has been done with quality, the project customer is excited about the project
deliverable, the project team is happy the project’s done, and management is ready for you to move onto other
assignments.

Sometimes closing the project isn’t nearly as cheery a picture as I paint above. Sometimes the project is riddled
with trouble, the project team is frustrated with the work, the project’s over budget, late or worse yet, the project
has been canceled altogether. Canceled projects shouldn’t just be thrown out. The close project processes can
offer some insight into what worked, what didn’t, and what the project manager, the project team, and even
management, should do better next time around.

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One of the first things you’ll have to achieve in your role as the project manager of a new project is to define the
project’s scope management plan. Now, your organization may rely on organizational process assets in the form
of a template for all projects, but it’s possible that you’ll be creating this scope management plan from scratch.
In this section, you’ll learn both approaches that you can apply to your projects and your PMI exam. This lecture
includes:

• Relying on project information


• Using templates and forms
• Creating the Project Scope Management Plan
• Performing product analysis
• Using alternative identification
• Interviewing experts and stakeholders

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Features and functions are key to developing the requirements of the product scope. These two words are
attached to a commonly misused term in project management: configuration management. Configuration
management is managing, documenting, and controlling the features and functions of the product as the product
is being created within project management.

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The second plan that comes out of scope planning is the requirements management plan. While similar in
nature, this plan explains how the project will collect, analyze, record, and manage the requirements throughout
the project. Like the scope management plan, this plan doesn’t list the actual requirements, but sets the rules for
how the project manager, team, and stakeholders will interact with the project’s requirements. This plan is also a
subsidiary plan for the overall project management plan. The project requirements are defined through many tools
and techniques to help document the requirements and to create a requirements traceability matrix. This lecture
details:

• Working with stakeholders to define requirements


• Requirement gathering techniques
• Documenting and publishing requirements
• Creating a requirements traceability matrix

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“I attribute my success to this: I
never gave or took any excuse.”
– Florence Nightingale

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Objectives are the goals of the project – the measurable, quantifiable goals of the project. Think of time, cost,
quality, technical requirements, blueprints, and product acceptance criteria. I stress the word quantifiable – avoid
loose terms in your objectives such as fast, good, satisfaction, and other subjective terms. What’s fast to you may
be slow to your customer. If you can attach a metric you need to.

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The project scope statement is one of the most important documents in the project. This lecture covers:
• Detailing the project objectives
• Describing the product scope
• Defining the project requirements
• Establishing the project boundaries
• Defining the project acceptance criteria
• Identifying the project constraints
• Listing the project assumptions
• Defining the initial project organization
• Defining the initial project risks
• Determining the schedule milestones
• Setting fund limitations
• Estimating the project costs
• Determining the project configuration management requirements
• Identifying project specification documents
• Documenting the project approval requirements

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The project scope statement is a document that defines what the project is, the project deliverables, and the work
that the project team (and likely contractors) will have to do in order to create the identified project deliverables.
The major purpose of the document is to communicate with the project team, the project customers, and the
project stakeholders a common understanding of the project’s purpose, goals, and objectives. The project scope
statement, as I’ll dive into one moment, also serves as a launching board for additional planning by the project
team and the project manager.

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Remember the phrase “features and functions” and the product scope? This section of the project scope
statement defines the level of control the project manager (and, often by proxy, the organization) will place over
the project change control requirements. Changes to the product scope will result in changes to the project scope.

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Alternative identification, just like it sounds, is a method to identify any other solutions, approaches, or
deliverables that would satisfy the customer’s product scope. For example, a customer wants an email server. They
don’t care if you use Microsoft Exchange Server or some home-grown POP3 mail server. All they want is an
email server that allows their staff to send and receive email. Alternative identification would identify, compare,
and contrast all the available solutions for the customer.

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A key concept for your PMP exam, and often your projects, is the Work Breakdown Structure (WBS). The WBS
is all about the project deliverables. It’s a breakdown of the project scope into hierarchical deliverables. The WBS
takes the project scope and breaks it down into smaller, manageable chunks of deliverables. Each layer of the
WBS breaks down the layer above it into smaller deliverables, until it arrives at the smallest item in the WBS, the
work package. This lecture details:

• Defining the WBS


• Using a WBS template
• Decomposing the project scope
• Creating the WBS
• Creating the WBS dictionary
• Defining the scope baseline

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The WBS is a decomposition of the project scope statement. It is a deliverables-oriented document that visualizes
all the things the project will create. It is not, and I stress the word not, the activity list. The WBS takes the project
scope statement and breaks it down into the deliverables the customer is expecting from the project. It organizes
and catalogs the project deliverables.

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Just as each project scope statement is unique, so too must each WBS be unique. Having said that, it is acceptable
to use a WBS from a previous, similar project and adapt it to your current project as a WBS template. Some
organizations have a consistent level of deliverables with all of their projects so they use a pre-populated template
to reflect these “every project” deliverables. For example, you might create a template that reflects your project
management plans, quality control charts, and expected reports that the project will generate.

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Scope validation is the process of the project customer accepting the project deliverables. It happens either at the
end of each project phase or as major deliverables are created. Scope validation ensures that the deliverables the
project creates are in alignment with the project scope. It is concerned with the acceptance of the work. A related
activity, quality control (QC), is concerned with the correctness of the work. Poor quality will typically result in
scope validation failure. How do you know your scope and deliverables are valid? This lecture will help you to
understand:

• Defining scope validation


• Performing scope validation
• Group-decision making techniques
• Gaining project acceptance

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Scope validation is an inspection-driven process that the project customer completes. Scope validation is a formal
sign-off on the work that has been completed so far in the project, and it allows the project to move onto the next
project phase. In a larger project the completion of a phase constitutes a phased gate which allows the project to
move onto the next project phase – and to be funded to reach the next phase of the project.

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“Doing the best at this moment
puts you in the best place for the
next moment.”
– Oprah Winfrey

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Scope control is about protecting the project scope from change and, when change does happen, managing those
changes. Ideally, all requested changes follow the scope change control system, which means that change requests
must be documented. Those changes that sneak into the project scope are lumped into that project poison
category of scope creep. Scope creep is, of course, bad, bad news. You must protect the project scope from
changes and this lecture will help. You’ll learn:

• Establishing a change control system


• Studying variances
• Replanning the project work
• Revisiting the configuration management system

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The project management planning processes are iterative, as you know, and will happen over and over throughout
the project. You and the project team—and even some key stakeholders—will work together to define the
project’s schedule management plan. This will happen early in the project’s planning processes, but chances are
good you’ll need to return to schedule management planning to adjust, replan, or focus on the schedule you’ve
created for the project. Schedules are created and designed throughout the project. This lecture will help you to
understand these concepts:

• Examining policies and procedures


• Working with a deadline
• Creating the schedule based on scope

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This subsidiary plan details how the project schedule will be managed, monitored and controlled, and protected
from change. It will identify the project phases, milestones, and circumstances which could affect the project’s
schedule, such as vendor delays, outside resources, or dependence on the outputs of other projects.

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When a project is first initiated, project managers often focus immediately on the labor and activities that will be
required to complete the project work. But that focus ignores the scope. In Chapter 5, I discussed the project
scope and the work breakdown structure (WBS) as prerequisites to defining the project activities. Before the work
actually begins you’ll need to work with the project team to define the activities to schedule. This lecture covers:

• Examining the inputs to activity definition


• Decomposing the project work
• Relying on project templates
• Using rolling wave planning
• Planning for more work
• Examining the project activities and their attributes

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So what’s a phased-gate estimate? Glad you asked. This is an estimate type where you provide a budget estimate
for the entire project, as in $80 million, but then you prepare a very detailed phased-gate estimate for the phase
that’s about to begin. This estimate is very detailed and shows management and the stakeholders what they’re
getting for their money during this project phase. In our $80 million project a phased-gate estimate for the current
phase may be five million. The monies spent in each phase totals $80 million.

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Now that the activity list has been created, the activities must be arranged in a logical sequence. This process calls
on the project manager and the project team to identify the logical relationships between activities, as well as the
preferred relationship between those activities. Once you have the activities defined you’ll need to put them in the
correct order. That’s what this module is all about:

• Defining the activity relationships


• Determining the network structure to use
• Establishing activity dependencies
• Applying leads and lags

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1. Finish-to-start: Activity A must finish before Activity B can start. Example: The walls must be primed
before the walls can be painted. This is the most common relationship you’ll use in project management.
2. Start-to-start: Activity C must start before Activity D can start. You’ll use this relationship type when you
want two activities to both start at the same time. Example: The network cable installation activity must start
so that the network patch panel can be installed. Both activities can happen at the same time.
3. Finish-to-finish: Activity E must finish so that Activity F can finish. You’ll use this relationship type when
you want, surprise, surprise, both activities to finish at approximately the same time. Example: The software
installation activity must finish so the software training class can finish. Users in the software training class
will return to their desktops to find the software they’ve just been trained on is now installed on their
computer.
4. Start-to-Finish: Activity H must start so that Activity G can finish. This is the most unusual and least
used relationship type. This relationship is primarily used with just-in-time manufacturing, just-in-time
scheduling, and inventory management systems.

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Sometimes there are activities that should have a delay between them. For example, you prime the walls and then
you need to wait 24 hours for the primer to cure before you can begin painting the walls. This “waiting time” is
called lag time. Lag time is considered positive time, because you are moving the successor tasks farther away from
the predecessor task in the project.

The inverse of lag time is called lead time. Lead time is when you allow two activities to move closer together and
even overlap. For example, let’s say you were remodeling a huge hotel ballroom. You believe it’ll take five days to
prime all of the walls in this ballroom. You wouldn’t necessarily need all of the walls primed before you could
begin the activity of painting. We could sequence the activities as finish-to-start but add lead time to the painting
activity to overlap the priming activity.

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Resources include materials, equipment, and people. After the project manager and the project team have worked
together to determine the sequence of the activities, they now have to determine which resources are needed for
each activity, as well as how much of each resource. As you can guess, resource estimating goes hand in hand with
cost estimating. This lecture will define:

• Considering the project work


• Examining the labor availability
• Estimating the resource need
• Creating a resource calendar

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“To succeed in life, you need
two things: ignorance and
confidence.”
– Mark Twain

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First, you identify the activities, sequence the activities, define the resources, and then estimate durations. These
processes are needed to complete the project schedule and the project duration estimate. These four processes
are iterated as more information becomes available. If the proposed schedule is acceptable, the project can move
forward. If the proposed schedule takes too long, the scheduler can use a few strategies to compress the project.
We’ll discuss the art of scheduling in a few moments.

Activity duration estimates, like the activity list and the WBS, don’t come from the project manager—they come
from the people completing the work. The estimates may also undergo progressive elaboration. In this section,
we’ll examine the approach to completing activity duration estimates, the basis of these estimates, and allow for
activity list updates. In order to predict when the project will end you’ll need to examine project activity duration.
That’s what this module covers:

• Estimating the project duration


• Using analogous estimates
• Using parametric estimates
• Using three-point estimates
• Creating a management reserve

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If your organization has completed similar projects there’s no reason to start an estimate from scratch. An
analogous cost estimate uses the historical information of past projects to predict the costs of the current project.
This is sometimes called a top-down estimate.

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If there’s a cost parameter within the project the project manager should use it. Examples include cost per
software license, cost per hour, cost per square foot of construction. A parametric model allows the project
manager to multiply the units times the parameter to create a cost estimate.

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Some project managers use what’s called a three-point estimate to predict how long the project duration will
take. This estimate type uses three points for each work package: the optimistic estimated time, the most likely
estimated time, and the pessimistic estimated time to predict how long each work package will take to complete.
The project manager then finds and uses the average of the three points to estimate how long the project work
will take to complete.

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The Program Evaluation and Review Technique (PERT) is similar to the three-point estimate. PERT uses a
weighted average while the three-point estimate does not. Here’s the formula for PERT: (Optimistic + (4 x Most
Likely) + Pessimistic)/6.

Activity: Task A has an Optimistic time of 28 hours, a Most Likely time of 45 hours, and a Pessimistic time of 80
hours. Find the predicted time for this task using PERT and using a three-point estimate.

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Parkinson’s Law states that work will expand to fill the amount of time it is allotted. Here’s an example: you, the
project manager, are working with your project team to determine how long each activity will take to complete.
Suzie knows that an assignment she’ll be completing for the project will probably take 32 hours to complete.
Suzie, however, knows that there might be some problems, some snags, or some other delay, so she “pads” the
duration estimate by eight hours and tells you it’ll likely take her 40 hours to complete the assignment.
Guess what? It’ll magically take 40 hours to complete the work. Suzie will either complete the work in 32 hours
and not tell you she’s done because she reported it’ll take 40 hours or she’ll ease through the work and use all 40
hours to complete the 32-hour assignment. Another possibility is that Suzie won’t start on the actual work until
hour eight and she’ll pray and hope nothing goes awry in the assignment. The worst possible scenario is that she’ll
wait until hour eight to begin, things do go awry, and she’ll require more than the allotted 40 hours for the work.

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The project manager, the project team, and possibly even the key stakeholders, will examine the inputs previously
described and apply the techniques discussed in this section to create a feasible schedule for the project. The
point of the project schedule is to complete the project scope in the shortest possible time without incurring
exceptional costs, risks, or a loss of quality.

Creating the project schedule is part of the planning process group. It is calendar-based and relies on both the
project network diagram and the accuracy of time estimates. When the project manager creates the project
schedule, she’ll also reference the risk register. The identified risks and their associated responses can affect the
sequence of the project work and when the project work can take place. In addition, if a risk comes to fruition,
the risk event may affect the scheduling of the resources and the project completion date. Do you know how to
calculate float? If not, this is the module you’ll want to spend some time in. This module includes:

• Examining the project network


• Finding the critical path and float
• Worksheet: Float Exercise
• Compressing the project schedule
• Simulating the project work
• Leveling the project resources
• Using the critical chain methodology
• Applying calendars and updating the project schedule

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Once you have created the activity list you and the project team can work together to create a project network
diagram. A project network diagram is a visual representation of the order of the activities needed in order to
complete the project. Most project network diagrams use a technique called the precedence diagramming method
– which is just a way to say that a project activity has predecessors and successors. A predecessor is an activity that
must be completed before a successor activity can begin.

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A benefit of using the project network diagram is that you can identify the critical path. The critical path is the
a path in the network diagram that cannot be delayed or the project will be late. You can find the critical path by
using project management software, such as Primavera or Microsoft Project. You can manually find the critical
path, if you really want to, by identifying all of the paths in the project network diagram and then adding up the
duration of all nodes used in that path.

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The idea of allowing some of the activities to be delayed, or rather taking advantage of delaying non-critical path
activities is called float – sometimes also called slack. Float is the opportunity to delay an activity.

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Float, or slack, is the amount of time an activity can be delayed without postponing the project’s completion.
Technically, there are three different types of float:

• Free float: This is the total time a single activity can be delayed without affecting the early start of any
successor activities
• Total float: This is the total time an activity can be delayed without affecting project completion.
• Project float: This is the total time the project can be delayed without passing the customer-expected
completion date.

There are a couple of different approaches to calculating float. I’m sharing the approach that I learned and that I
think is the best approach. You may have learned a different method that you prefer. You won’t hurt my feelings
if you use your method to get the same result as my method. What’s most important is that you understand the
concepts of forward and backward passes, and that you can find the critical path and float in a simple network
diagram.

Most project management software will automatically calculate float. On the PMP exam, however, candidates will
be expected to calculate float manually. Don’t worry—it’s not too tough.

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Schedule compression is also a mathematical approach to scheduling. The trick with schedule compression, as its
name implies, is calculating ways the project can get done sooner than expected. Consider a construction project.
The project may be slated to last eight months, but due to the cold and nasty weather typical of month seven, the
project manager needs to rearrange activities, where possible, to end the project as soon as possible.

In some instances, the relationship between activities cannot be changed due to hard logic or external
dependencies. The relationships are fixed and must remain as scheduled. Now consider the same construction
company that is promised a bonus if they can complete the work by the end of month seven. Now there’s
incentive to complete the work, but there’s also the fixed relationship between activities.

To apply duration compression, the performing organization can rely on two different methods. These methods
can be used independently or together, and are applied to activities or to the entire project based on need, risk,
and cost.

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Crashing means that the project manager will add labor to the project work in order to complete it faster
than originally planned. Fast tracking allows entire phases of a project to overlap. You might see this in larger
construction projects where the foundation of a building isn’t completed all the way around but the skeleton
of the building is being constructed just steps behind the foundation phase. The problem, and danger, with fast
tracking is that it increases risk in the project. If there’s a problem with the first phase deliverable it’s likely to
impact all of the phases that have overlapped it.

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Like most things in a project, the project manager will need to work to control the schedule from slipping
off its baseline. A schedule control system is a formal approach to managing changes to the project schedule.
It considers the conditions, reasons, requests, costs, and risks of making changes. It includes methods of
tracking changes, approval levels based on thresholds, and the documentation of approved or declined changes.
The schedule control system process is part of integrated change management. This lecture will help you to
understand:

• Examining the project schedule characteristics


• Examining the schedule baseline
• Reporting the project progress
• Using a schedule change control system
• Examining schedule variances
• Using schedule comparison bar charts

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“After every difficulty, ask
yourself two questions: “What
did I do right?” and “What
would I do differently?”
– Brian Tracy

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You need a plan just for project costs. You need a plan that will help you define what policies you and the project
team have to adhere to in regard to costs, a plan that documents how you get to spend project money, and a plan
for how cost management will happen throughout your entire project. Well, you’re in luck! This plan, a subsidiary
plan of the project management plan, is the project cost management plan. You’ll need to understand all about
the project’s cost management plan for your PMP exam. This lecture covers:

• Creating the cost management plan


• Adhering to organizational policies and procedures
• Relying on organizational process assets and enterprise environmental factors

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Like the schedule management plan, the cost management plan defines the process for controlling and managing
costs (instead of time). The cost management plan does acknowledge the expenses within the project and how
variances to those expenses will be managed and communicated.

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Assuming that the project manager and the project team are working together to create the cost estimates, there
are many inputs to the cost-estimating process. For your PMI exam, it would behoove you to be familiar with
these inputs because these are often the supporting details for the cost estimate the project management team
creates. Cost estimating uses several tools and techniques. You’ll learn in this module:

• Following the organizational process assets


• Building a cost management plan
• Creating an analogous estimate
• Determining resource cost rates
• Create a bottom-up estimate
• Building a parametric estimate
• Using the PMIS
• Analyzing vendor bids
• Considering the contingency reserve
• Presenting the cost estimate

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Everyone wants to know how much your project will cost. The more information you have available, such as the
project scope statement or the WBS, the more reliable your cost estimates will be.

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As a general rule, project cost estimates move through three cost estimates:
1. Rough order of magnitude – This is the ballpark estimate. These are the wild estimates where the project
sponsor pitches an idea and asks for a ballpark price. A rough order of magnitude (ROM) estimate can
vary -25 percent up to +75 percent of the fee. As expected, ROM estimates are not very reliable.
2. Budget estimate – As the project moves into the initial planning and more specifics are known about the
project a budget estimate can be created. Budget estimates may range from -10 percent to +75 percent.
3. Definitive estimates – Finally an estimate we can depend on. The definitive estimate is the most accurate
of all three progressions of project cost estimates. Its range of variance can be from -5 percent to +10
percent. What makes this estimate type so reliable? The work breakdown structure has to be in existence
in order to create a definitive estimate. So while the definitive estimate is the most accurate it also takes the
longest to complete. (If you’re thinking this sounds an awful lot like the bottom-up estimate you’re right –
it’s the same darn thing.)

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If your organization has completed similar projects there’s no reason to start an estimate from scratch. An
analogous cost estimate uses the historical information of past projects to predict the costs of the current project.
This is sometimes called a top-down estimate.

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If there’s a cost parameter within the project the project manager should use it. Examples include cost per
software license, cost per hour, cost per square foot of construction. A parametric model allows the project
manager to multiply the units times the parameter to create a cost estimate.

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A bottom-up estimate starts at zero and accounts for each deliverable in the project’s WBS. This is the most
accurate estimate type, but it takes the longest amount of time to complete.

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Activity: Consider a project that has a task with an optimistic estimate of 25 hours, a most likely estimate of 55
hours, and a pessimistic estimate of 80 hours.

• Using PERT, what’s the predicted duration of the task?


• Using a three-point estimate, what’s the predicted duration of the task?
• What’s the difference between the two estimates?

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Now that the project estimate has been created, it’s time to create the official cost budget. Cost budgeting is
really cost aggregation, which means the project manager will be assigning specific dollar amounts for each of
the scheduled activities or, more likely, for each of the work packages in the WBS. The aggregation of the work
package cost equates to the summary budget for the entire project. There is a difference between what was
estimated and what’s actually being spent on the project. This lecture defines:

• Aggregating the project costs


• Completing project cost reconciliation
• Creating the project cost baseline
• Examining the project cash flow

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Let’s reflect on that summary budget for a moment. Here in this big overview of project management it’s
easy for me to say blah – you need a summary budget based on X, Y, and Z. I’m not a simpleton; I know that
organizations often slap a price tag on a project based on historical information, shallow research, or based on
what’s left in the bank account to get a project done. Every organization works differently regarding how projects
get funded. The note here is to learn how your project gets funded and then act accordingly.

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Scope verification works along with the concept of step funding. When a phase is complete and scope verification
approves the phase a new round of funding is provided to the project. The above figure demonstrates the curve
of the project schedule and costs while the “stair steps” represent the monies to pay for the materials and labor to
reach each phase of the project.

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Once a project has been funded, it’s up to the project manager and the project team to work effectively and
efficiently to control costs. This means doing the work right the first time. It also means, and this is tricky,
avoiding scope creep and undocumented changes, as well as getting rid of any non-value-added activities.
Basically, if the project team is adding components or features that aren’t called for in the project, they’re wasting
time and money.

Cost control focuses on controlling the ability of costs to change and on how the project management team may
allow or prevent cost changes from happening. When a change does occur, the project manager must document
the change and the reason why it occurred and, if necessary, create a variance report. Cost control is concerned
with understanding why the cost variances, both good and bad, have occurred. The “why” behind the variances
allows the project manager to make appropriate decisions on future project actions. Managing cost control is an
ongoing activity within a project. This lecture defines cost control, including earned value management. You’ll
learn:

• Working with a cost change control system


• Measuring project performance
• Earned Value Management fundamentals
• Finding project variances
• Calculating the project performance
• Forecasting the project performance
• Earned Value Management formula review

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Activity: You are the project manager for your company. Your project has a budget of $450,600 and you are
twenty percent complete today. You were, however, supposed to be 25 percent complete. In addition, you’ve spent
$99,000 to reach this point in the project.

Based on this information find these values:

• Earned value
• Planned value
• Cost variance
• Schedule variance

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Activity: You are the project manager for your company. Your project has a budget of $450,600 and you are
twenty percent complete today. You were, however, supposed to be 25 percent complete. In addition, you’ve spent
$99,000 to reach this point in the project.

Based on this information find these values:

• CPI
• SPI

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Activity: You are the project manager for your company. Your project has a budget of $450,600 and you are
twenty percent complete today. You were, however, supposed to be 25 percent complete. In addition, you’ve spent
$99,000 to reach this point in the project.

Based on this information find these values:

• Estimate at Completion
• Estimate to Complete
• Variance at Completion

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Activity: You are the project manager for your company. Your project has a budget of $450,600 and you are
twenty percent complete today. You were, however, supposed to be 25 percent complete. In addition, you’ve spent
$99,000 to reach this point in the project.

Based on this information find these values:

• To-Complete Performance Index using the BAC


• To-Complete Performance Index using the EAC

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Quality planning is the process of first determining which quality standards are relevant to your project and then
finding the best methods of adhering to those quality standards. This is a great example of project integration
management, which was referred to earlier. Quality planning is core to the planning process group because each
knowledge area has relevant standards that affect quality, and quality planning is integrated into each planning
process. Quality can be an esoteric topic, but this lecture will help. You’ll learn:

• Defining project quality


• Completing a cost-benefits analysis
• Benchmarking the project
• Performing a design of experiments
• Determining the cost of quality
• Creating the Quality Management Plan
• Establishing quality metrics
• Using quality checklists
• Creating a Process Improvement Plan
• Establishing a quality baseline

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Quality is the ability of product or service to satisfy stated and implied need and expectations. It’s all about
a fitness for use and conformance to requirements. The quality management plan defines what the project’s
expectations are, how quality assurance will be enforced, and how quality control will be administered within the
project. Quality assurance is an organization-wide program, such as ISO 9000, that serves to prevent mistakes
from entering the project. Quality control is an inspection-driven process that server to prevent mistakes from
reaching the customer.

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“Follow effective actions with
quiet reflection. From the quiet
reflection will come even more
effective action.”
– Peter Drucker

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A common misunderstanding when it comes to quality: quality and grade are not the same thing. Quality is about
a fitness for use and conformance to project requirements. Grade is a ranking or measurement of a product or
service. A perfect example is my flight. When I’m taking a long flight I typically opt for first class. If the flight is
less than three hours, I’m in coach. Grade is the difference between first and coach. With each level of grade there
are different expectations. I can have a quality flight in coach or first class – one isn’t of more quality than the
other, it’s just their grade and purpose. Grade is centered on expectations while quality is centered on stated and
implied needs.

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Imagine shooting five arrows at a bulls-eye target. Your five arrows all hit the center of bulls-eye - that’s both
precise and accurate. Meet Bob. Bob shoots his five arrows at his target. All of Bob’s arrows hit in the upper
right edge of the bulls-eye target in the outer ring. His shots were precise, as they were bunched together, but not
accurate for the goal of the center of the target.

Jane shoots her five arrows. Hers all hit within the three rings closest to the bulls-eye, but not all in the center of
the target. Her shots are accurate, but still not precise.

Now I shoot my five arrows and they’re all over the place - except for the center of the target. My shots aren’t
accurate or precise.

Accuracy is hitting what’s required. Precision is about repeatedly hitting the same performance. Both are about
exactness, but it’s more about hitting the correct goal and be able to repeat the hit.

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This subsidiary plan works to remove non-value added activities and components of the project’s processes. Its
goal is to improve and streamline the project’s processes to help the project manager and the project team to
better manage, control, and complete the project.

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Quality assurance (QA) is the sum of the creation and implementation of the plans by the project manager, the
project team, and management to ensure that the project meets the demands of quality. QA is not something
that is done only at the end of the project, but is done before and during the project as well. Quality management
is prevention-driven; you want to do the work correctly the first time. Quality assurance is a prevention-driven
activity. This lecture will explore that concept through these topics:

• Defining QA
• Performing a quality audit
• Examining the project processes
• Recommending corrective actions

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The concept of quality assurance (QA) enters the project management stage. QA is a management-driven
process to ensure that the project work is done right the first time. QA is a prevention-driven process. What’s
it preventing? It prevents mistakes, rework, corrective actions, and a breakdown of quality within the project
deliverables. Quality assurance is comprised of four key points:
• Customer satisfaction
• Prevention
• Management provisions
• Plan-Do-Check-Act

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This is the section of the project where the project manager and the project team have control and influence.
Quality assurance (QA), for the most part, is specific to your organization, and the project manager doesn’t have
much control over the QA processes—he just has to do them. Quality control (QC), on the other hand, is specific
to the project manager, so the project manager has lots of activities. Quality control is an inspection-driven
activity and you’ll learn that concept through this lecture.

• Performing quality control measurements


• Creating a cause and effect diagram
• Creating a control chart
• Completing project flowcharting
• Creating a histogram
• Examining a Pareto chart
• Creating a run chart
• Examining a scatter diagram
• Completing a statistical sampling
• Inspecting the project work
• Review defect repair
• Quality control and lessons learned

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Quality control is an inspection-driven process that the project manager and the project team do to keep mistakes
out of the customer’s hands. Its goal is to confirm that quality exists within the project deliverables and then to
pass the deliverables on to the customers for their scope verification process. Should quality not exist within the
project, then there’s an analysis of why quality is missing and how quality can be injected back into the project.

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The HR management plan defines what roles and responsibilities are needed on the project team and how those
resources will be managed. This plan also defines how project team members will be brought onto and released
from the project team.

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Have you noticed that every knowledge area for your PMI examination starts with a planning process? Hmmm,
I hope so. Planning is an iterative process that begins early in the project and continues through the project
management life cycle. Planning for project human resources is vital to a successful project. After all, you’ve got
to plan how the project work will be completed and which resources will complete that work.

When it comes to planning human resources, the project manager is aiming to plan for several facets of the
project. This lecture defines the planning for HR management:

• Defining human resource planning


• Examining the project interfaces
• Considering the project constraints
• Charting the organizational structure
• Defining the project roles and responsibilities
• Creating the Staffing Management Plan

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“If the only tool you have is a
hammer, you tend to see every
problem as a nail.”
– Abraham Maslow

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You need people to complete your project. But have you ever managed a project where the resources you wanted
on the project were not available? Or have you managed a project where the resources you were assigned weren’t
the best resources to complete the project work? Staff acquisition is the process of getting the needed resources
on the project team to complete the project work. It focuses on working within the policies and procedures
of the performing organization to obtain the needed resources to complete the project work. Negotiation,
communication, and political savvy are the keys to getting the desired resources on the project team. For your
PMP exam, it’s important to understand that how a project manager acquires the project team can vary by
organization. You’ll need to know all of these topics:

• Working with your organization


• Managing a pre-assigned project team
• Negotiating for project resources
• Acquiring project resources
• Relying on virtual project teams

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In order to complete a project the project manager needs something special – the project team! The project team
is the collection of individuals that will actually be doing the work as defined in the project plan. They’re the
experts, the resources, and the roles that the project manager has to oversee and work with in order to get the
project to its glorious finish.

So how does it work in your organization? Does the project team get assigned to the project manager or does the
project manager get to cherry pick the project team members? Your organization’s policies and procedures will
likely outline how the project team is built, or inherited, by the project manager. Every organization is different,
and the culture and organizational structure will influence how the project team is created. Certainly project
priority, the project sponsor, and good old politics come into play when it comes to which project team member
you’re assigned or allowed to have on your project.

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Ideally, the project team is collocated – meaning the project team can work side-by-side with one another. A
collocated project team communicates easier, can be more civil, and can move the project work along by joining
efforts and creating synergy. Knowing that we don’t live in an ideal world, however, collocated teams are falling
prey to virtual teams. A virtual team is just a nice way of saying non-collocated. Individuals are dispersed around
the globe and they rely on collaborative software, email, and telephones to communicate and work together.

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The project team is developed by enhancing the competencies of the individual project team members and
promoting the interaction of all the project team members. Throughout the project, the project manager will have
to work to develop the project team. The project manager may have to develop an individual team member’s skills
so that she can complete her assignments. The project manager will also have to work to develop the project team
as a whole so that the team can work together to complete the project. The project manager can use certain tools,
techniques, and approaches to develop the project team. That’s what this module details:

• Using general management skills


• Training the project team
• Using team building activities
• Establishing ground rules for the project team
• Working with non-collocated teams
• Establishing a rewards and recognition system
• Assessing the team performance

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Regardless of the team’s locale, the project manager can attempt to facilitate team development. Team
development is a natural process that project teams cycle through as they learn about one another and accept their
positions and roles within the project team. Technically, there are four stages of team development:
• Forming. The project team is coming together for the first time and pleasantries are offered. Um, obviously
if the project team has worked together in the past forming doesn’t take too long.
• Storming. Ooh – things are heating up. People on the team are exerting their influence, solidifying their
positions, and trying to stake their leadership position within the project. This leadership can be for good
or for bad.
• Norming. Alright, things have settled down and the project team has accepted their roles as leaders or
followers.
• Performing. Here’s the good part – the project team has accepted their roles and they’re now focusing on
completing the project work.

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Now that the project manager has planned for the human resources and developed the project team, he can
focus on managing the project team. This process involves tracking each team member’s performance, offering
feedback, taking care of project issues, and managing those pesky change requests that can affect the project team
and its work. The staffing management plan may be updated based on lessons learned and changes within the
team management process. The project manager will have to manage the project team. This includes:

• Observing and conversing with project team members


• Completing project team appraisals
• Resolving and managing team conflict
• Creating an issue log

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• Withdrawal. Have you ever been talked to death by a proposed solution that caused you to give up and
leave the conversation? You withdraw from the disagreement and just let the other person have their way,
as it was easier than fighting over your proposed solution.
• Smoothing. Smoothing is when the commonalities are stressed and the differences are downplayed.
Smoothing smooths the magnitude of the problem.
• Compromising. Compromising always sounds so nice but it really isn’t. Compromising means that
both parties have to give up something that they want. Both parties give up something, and that’s why
compromising is often called a lose-lose.
• Forcing. Forcing is when one party forces their will on the other party. The person with the power in the
project or organization makes the decision.
• Collaborating. This is a win-win and is the same approach as problem solving.
• Problem solving. This approach is the most welcome and probably the most common in our projects.
Problem solving is about finding a solution to the problem in a spirit of cooperation.

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• Expert. The project team sees you, the project manager, as an expert in the technology or discipline the
project focuses on. Makes sense, right? It’s easier to trust and follow someone when they know what the
heck they’re talking about.
• Reward. The project team sees you as someone who can reward them for their work. Everyone’s happy
when they know the project manager can give bonuses, good reviews, and other rewards.
• Formal. The project team sees you a figure head without any real power. This weak power may also be
known as positional power.
• Coercive. The project team sees you as someone who can punish them if they don’t do their work on
time and as expected. Coercive power can be useful when project team members don’t respond to project
incentives – it’s the carrot or the stick mentality.
• Referent. The project team sees you as someone acting on someone else’s behalf. For example, you say,
“Team we’re doing it this way because Marcy the CEO put me in charge.” This works especially well when
you actually have a CEO named Marcy.

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Communication planning is actually done very early in the project planning processes. It’s essential to answer the
previous questions as early as possible because their outcomes can affect the remainder of the project planning.
Throughout the project, updates to communications planning are expected. Even the responses to the five project
management communication questions can change as stakeholders, project team members, vendors, and other
project interfaces change.. Communication is key to most of project management. This lecture defines:

• Examining the communications model


• Analyzing communication requirements
• Determining the communications technology
• Creating the Communications Management Plan

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“The best years of your life are
the ones in which you decide your
problems are your own. You do
not blame them on your mother,
the ecology, or the president. You
realize that you control your own
destiny.”
– Albert Ellis

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Several factors affect project communications and how you’ll communicate:
• Urgency of the information to be communicated. If your project has just turned disastrous is an email
really the best way to communicate the information? The urgency of the information should dictate how
the project manager communicates – and is expected by the stakeholders to communicate.
• Communication technologies. Web sites, email, instant messaging, text messages, and more – all
technologies that help ease communication between the project manager, project team members, and
other key stakeholders. It’s a good idea, however, to identify the preferred methods for communicating at
the launch of the project. You probably don’t want status reports delivered via voice mail.
• Project staffing. Large projects, sometimes called macro projects, may have a dedicated administrative staff
that can help ease the communication demands. Smaller projects, micro and MAC projects, likely don’t
have this luxury so communication demands fall onto the project manager and the project team.
• Project length and priority. Long-term, important projects need a defined schedule for how and when
project communications will take place. It’s essential for the project manager and the project team to
document the communication expectations on larger and high-profile projects. A consistent schedule for
communications is part of successful project management and keeps stakeholders abreast of the project’s
progress.
• Project environment. Some projects are loose, small, and even volunteer-driven. Other projects are
important, dangerous, or expensive. The nature of the project will, to some extent, determine the type
and frequency of project communications. The organization of the project team will also affect how
communication will occur – consider a virtual team and its communication challenges compared to a
collocated team working in a war room.

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Activity: Consider that you have 340 stakeholders in your project this week. Next week you’ll have 23 more
stakeholders. How many more communication channels will you have next week compared to now?

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A project management principle: 90 percent of project manager’s time is spent communicating. Consider all
of the project team members, management, other project managers, vendors, regulatory agencies, and other
stakeholders the project manager has to communicate with in order for the project to be successful. This project
management plan defines who needs what information, when do they need it, and in what modality. Part of the
communications management plan is a schedule of expected communication types such as reports, interviews,
and scheduled meetings.

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Now that the project’s communications management plan has been created, it’s time to execute it. Managing
project communications is the process of ensuring that the proper stakeholders get the appropriate information
when and how they need it. Essentially, it’s the implementation of the communications management plan. This
plan details how the information is to be created and dispersed, and also how the dispersed information is
archived. Managing project communications ensures that the right people, get the right message, at the right time,
in the right modality.

• Examining communication skills


• Creating an Information Gathering and Retrieval System
• Dispersing project information
• Documenting the project’s Lessons Learned
• Updating the organizational process assets

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All of the project communications – okay, not all of it, but most of it – should be organized in a project
communication retrieval system. This can be a fancy-schmancy database or just a well-organized banker’s box. The
reports, presentations, emails, stakeholder feedback, and other communiqué all will become part of the project’s
historical information and that can support the project’s product once it goes into operations, as well as help other
project managers learn from the current project.

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Throughout the project, customers and other stakeholders are going to need updates on the project performance,
work status, and project information. The work performance information—the status of what’s been completed
and what’s left to do—is always at the heart of performance reporting. Stakeholders want to be kept abreast of
how the project is performing, but also what issues, risks, and conditions in the project have evolved.

Controlling communication is the process of following the communications management plan, distributing
information, and sharing how the project is performing. Performance reporting is the process of collecting,
organizing, and disseminating information on how project resources are being used to complete the project
objectives. In other words, the people footing the bill and who are affected by the outcome of the project need
some confirmation that things are going the way the project manager has promised. This lecture details:

• Determining the communication method


• Dispersing project information
• Creating an Issue Log

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Risk management planning is not the identification of risks or even the response to known risks within a project.
Risk management planning is how the project management team will complete the risk management activities
within the project. These activities really set up the project to effectively manage the five other risk management
activities. Risk management planning creates the risk management plan.

By deciding the approach to each of the risk management activities before moving into them, the project
management team can more effectively identify risks, complete risk analysis, and then plan risk responses. In
addition, planning for risk management also allows the project management team to create a strategy for the
ongoing identification and monitoring of existing risks within the project. This lecture will define all of risk
management planning:

• Defining project risk


• Hosting a risk planning meeting
• Creating a Risk Management Plan

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This subsidiary plan defines the process for risk management – how the risk management processes will take
place within the project. It identifies the risks within the project, the process to record and rank those risks, and
what the proposed risk responses may be.

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“You don’t have to see the whole
staircase, just take the first
step.”
– Martin Luther King, Jr.

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Risk identification is the systematic process of combing through the project, the project plan, the work
breakdown structure (WBS), and all supporting documentation to identify as many of the risks that may affect the
project as possible. Remember, a risk is an uncertain event or condition that may affect the project outcome. Risks
can be positive or negative. This lecture includes:

• Reviewing project documentation


• Identifying the project risks
• Analyzing the project assumptions
• Diagramming project risks

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Recall that the risk register is a component of risk management – it’s a database of the identified risks within the
project and their probability, impact, and potential responses. The risk register should also identify the risk status,
the outcome of past risk events, and the risk owners within the project. The register may also record triggers and
thresholds and any other related information.

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The first, and somewhat shallow, risk analysis is qualitative analysis. Qualitative risk analysis “qualifies” the risks
that have been identified in the project. Specifically, qualitative risk analysis examines and prioritizes the risks
based on their probability of occurring and the impact on the project if the risks do occur. Qualitative risk
analysis is a broad approach to ranking risks by priority, which then guides the risk reaction process. The end
result of qualitative risk analysis (once risks have been identified and prioritized) can either lead to more in-depth
quantitative risk analysis or move directly into risk response planning. Qualitative risk analysis is a high-level, fast
method of qualifying the risk for more analysis. This lecture will define:

• Using a risk register


• Creating a risk probability and impact matrix
• Examining the data quality
• Categorizing risks
• Updating the risk register

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You can use red, amber, green, (sometimes called RAG rating), very low to very high, or do what I did in the
example and just use low to high. See how it’s subjective? Some risks will be obviously low impact and/or low
probability while other risks will warrant a more heated discussion among the participants that are doing the
qualitative analysis. The result of qualitative analysis is to “qualify” the more probable and more serious risks for
additional analysis. This doesn’t mean that you get to dismiss the risk events which are scored as low. All risks,
including the low risks, are entered into a risk register, a database of all the risks within the project. The conditions
and status are monitored as the project moves into execution.

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Quantitative risk analysis attempts to numerically assess the probability and impact of the identified risks. It also
creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies
on several different tools to accomplish its goal.

Qualitative risk analysis typically precedes quantitative risk analysis. I like to say that qualitative analysis qualifies
risks, while quantitative analysis quantifies risks. All or a portion of the identified risks in qualitative risk analysis
can be examined in the quantitative analysis. The performing organization may have policies on the risk scores in
qualitative analysis that require the risks to advance to the quantitative analysis. The availability of time and budget
may also be a factor in determining which risks should pass through quantitative analysis. Quantitative analysis is a
more time-consuming process, and is, therefore, also more expensive. This lecture will cover:

• Gathering risk data


• Creating a risk probability distribution
• Modeling risk data
• Creating a contingency reserve
• Updating the risk register

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Quantitative analysis aims to quantify the risk exposure and often ties a dollar amount to the risk event. The
process of quantitative risk analysis isn’t as quick or nearly as subjective as qualitative risk analysis. The project
manager, project team members, risk specialists, and business analysts will take the identified risks and complete
testing, business cases, root cause analysis, and other studies in their attempt to quantify the risks.

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Risk response planning is all about options and actions. It focuses on how to decrease the possibility of risks
adversely affecting the project’s objectives and also on how to increase the likelihood of positive risks that can
aid the project. Risk response planning assigns responsibilities to people and groups close to the risk event. Risks
will increase or decrease based on the effectiveness of risk response planning. This lecture will help you learn
everything there is to know for your PMP exam about risk responses. This includes:

• Determining the risk tolerance


• Considering negative risks
• Planning for positive risks
• Accepting risk responses
• Creating a contingent response strategy

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• Mitigation. This is an action to reduce or eliminate the risk event, its probability, and/or impact. You’ll likely
use mitigation when you’ve identified a risk event that has a high impact on the project. In some instances you
can spend monies to reduce the risk’s likelihood of occurring or you might allot additional time or change the
project network diagram to mitigate the risk event.
• Transference. You’ve probably used transference already by hiring someone else to own the risk event.
Consider a construction project: the electrical work is too dangerous for an organization to do on their own,
so they hire a licensed electrician to complete the dangerous electrical work. The risk of electricity didn’t
disappear. It’s still dangerous, but the electrician owns the work. Transference usually requires a contract
between the two parties and a payment from the project to the new risk owner.
• Avoidance. This one is easy – you’re taking measures to avoid the risk. Let’s say you’re managing a database
conversion project. One of the risk events is the loss of data if the conversion takes place during the usual
Monday through Friday work week. You avoid the risk by doing the conversion outside of the usual business
hours – nights and weekends.

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• Enhance. This risk response is an effort to make a positive risk event happen. Your project can earn $25,000
in bonuses if your project team doesn’t have to work overtime. In order to enhance the positive risk event you
hire a contractor for $5,000 to help the project team complete their assignments on time. You’ve enhanced the
positive risk by spending $5,000.
• Exploit. Wouldn’t you take advantage of a great positive risk? Let’s say your project creates a by-product, such
as data or raw materials, that can be sold on the marketplace. You’d work to exploit this risk to sell the by-
product and realize an unexpected, but welcome, profit.
• Share. Sharing is nice. A vendor will give your project a steep discount on their software if you’ll purchase 100
licenses. Your project only needs 70 licenses so you identify other project managers and business units that
could use the product and take advantage of the offered discount.

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• Acceptance. Sometimes a risk event is so tiny that you just accept the risk and move along. Other times,
however, there’s nothing you can do about the risk regardless of its probability and impact so you just accept
it – like a pending law, company policy, or weather.

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Risks must be actively monitored, and new risks must be responded to as they are discovered. Risk monitoring
and control is the process of monitoring identified risks for signs that they may be occurring, controlling
identified risks with the agreed-upon responses, and looking for new risks that may creep into the project. Risk
monitoring and control also is concerned with the documentation of the success or failure of risk response plans
and keeping records of metrics that signal risks are occurring or disappearing from the project. This lecture will
help you to:

• Reassess the project for risks


• Complete a risk audit
• Examine the project trends and technical performance
• Host a project status meeting
• Recommend corrective and preventive actions

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You’ve several activities to do with the project team when it comes to risk management:
• When risk events are happening in the project and your project team fires away with the planned risk
responses, you have to check that the risk responses are working as you planned. If not, you’ll need fast-action
to find a new solution to squelch the risk.
• Determine if the project assumptions are proving false and if they’re becoming project risks. Assumptions are
anything that you believe to be true, but you’ve not proven to be true. If your assumptions prove false then
they’re becoming risks in the project.
• Monitor risk thresholds and your risk triggers. This means as part of managing the project team you’re
communicating pending risk events and what risks could be coming into play.
• Encourage the project team to be identifying new risk events or risk events that haven’t been identified as
the project work happens. This process provides time to perform qualitative and quantitative analysis and to
create risk responses. Of course, all newly-discovered risk events are also recorded in the risk register.

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“Success is not final, failure is
not fatal: it is the courage to
continue that counts.”
– Winston Churchill

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Procurement planning is the process of identifying which part of the project should be procured from resources
outside of the organization. Generally, procurement decisions are made early on in the planning processes.
Procurement planning centers on four elements:

• Whether procurement is needed


• What to procure
• How much to procure
• When to procure

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There are multiple types of contracts when it comes to procurement. The project work, the market, and the
nature of the purchase determine the contract type. Here are some general rules that CAPM and PMP exam
candidates, and project managers, should know:

• A contract is a formal agreement between the buyer and the seller. Contracts can be oral or written—although
written is preferred.
• The United States backs all contracts through the court system.
• Contracts should clearly state all requirements for product acceptance.
• Any changes to the contract must be formally approved, controlled, and documented.
• A contract is not fulfilled until all of its requirements are met.
• Contracts can be used as a risk mitigation tool, as in transferring the risk. All contracts have some level of
risk; depending on the contract type, the risk can be transferred to the seller. If a risk response strategy is
to transfer, risks associated with procurement are considered secondary risks and must go through the risk
management process.

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Most projects work with vendors for contracted labor, materials, or services. Whenever a project has to deal
with an entity outside of the immediate performing organization a contract is needed. A contract is a legally-
binding document that is backed up by the court system (in the United States). A contract defines the offer and
consideration – an amount of money in consideration for the work or services provided by the vendor.

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This contract type, also known as a lump-sum contract, defines a price for the contracted work regardless of the
materials or labor used. For example, if you hired a contractor to add a deck onto your house you might use a
fixed-priced contract where the cost of the deck is $7,500 – that’s the most you’ll pay for the deck. The vendor
has the risk should there be overtime in labor, wasted materials by his crew, or if the cost of materials fluctuates.
You, however, will only pay $7,500 for the work.

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This contract type is similar to a fixed-price contract but you and the vendor have worked out some details on
a bonus structure. For example, if you were remodeling a building into condos you might have milestone dates
within the schedule that represent bonuses to the vendor if he can meet them. The incentive for the vendor is the
bonus pay, the incentive for you, the buyer, is that you’ll get to rent or sell your condos as soon as the vendor gets
the work done. There are several models of fixed-price incentive fee contracts including penalties for a vendor
missing deadlines.

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Cost-plus contracts are generally riskiest to you, the buyer. These contracts charge the buyer for contracted work
plus a variable such as time fees, materials, or the worst – a percentage of the costs associated with the work.
These contracts give the vendor lots of room to waste materials and charge you for their mistakes. These are the
riskiest contract types for buyers. Above all avoid the dreaded cost plus a percentage of cost contract. The vendor
can actually increase their profit margin by wasting materials. Not good.

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“If I had eight hours to chop
down a tree, I’d spend six hours
sharpening my ax.”
– Abraham Lincoln

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Conducting project procurement means that your determining which vendor to hire for your project. Once the
plan-contracting process has been completed, the actual process of asking the sellers to participate can begin.
Fortunately, the sellers, not the buyers, perform most of the activity in this process—usually at no additional cost
to the project.

This lecture will help you to understand these topics:

• Hosting a bidders conference


• Advertising for bidders
• Developing a qualified sellers list
• Creating a Procurement Document Package
• Using a weighting system
• Working with independent estimates
• Creating a screening system
• Negotiating for the best deal
• Relying on seller rating systems

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Vendors need the SOW and may get it one of several ways.
• Preferred vendors list. Most organizations have a preferred vendors list that they’ll issue the SOW to.
• Advertising. Government agencies typically are required to announce projects that are open for bid in the local
newspapers. SOWs are issued to qualified vendors that will participate in the bidding process.
• Evaluation criteria. An organization may evaluate potential vendors to determine if the vendors qualify
to participate in the procurement process. For example, an evaluation criteria could be top-secret security
clearance with two certified Project Management Professionals on staff.

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In the planning process group you created the procurement management plan. Now you’re about to execute this
beauty of a plan by inviting sellers to bid on your project work. Once you’ve collected the bids and proposals
then you’ll choose the best vendor for your project. Recall that the procurement management plan defined the
acceptable contract types and the processes of how you’ll choose vendors. Some of the information I share in
this section might not apply to you at all as your organization may manage the procurement process away from
the project managers. Don’t sweat it – managing a project is tricky enough, let someone else deal with the vendors.

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• Request for Quote (RFQ) – A RFQ is a document that asks the sellers to provide a price for the services
or goods the organization is interested in purchasing. An RFQ means the buyer wants to purchase, but is
interested in price only.
• Invitation for Bid (IFB) – Like an RFQ, an IFB is a document from the buyer to the sellers asking for a price
only. It’s, for essential purposes, the same type of document as an RFQ.
• Request for Proposal (RFP) – A RFP is document from the buyer to the sellers asking for a proposed solution
and a price. This document is different than the IFB and the RFQ, because the buyer is inviting the vendor to
create a solution for the project. Proposals are generally more work for the vendor, because the vendor may
create a solution for the buyer but they still may not be awarded the contract.

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The buyer then evaluate the bids, quotes, and proposals to determine which vendor can best answer the project’s
needs. Organizational policies may dictate how a vendor gets selected, but most organizations choose a vendor
based on one or more of the following:
• Weighted system. Categories are identified, such as cost, time, experience, references, and points are assigned
to each category. Each vendor’s bid, quote, or proposal is measured and scored in each of these categories.
The vendor that receives the highest score is awarded the contract.
• Independent estimates. This approach is also called a “should-cost” estimate. The buyer hires a third-party to
create an estimate for the project’s procured work. This third-party estimate serves as a means for the project
work to be procured – as a guide to what the work “should cost.”
• Screening systems. This popular approach identifies qualifications and specifications the proposed vendors
must have in order to qualify for the project. If the vendor doesn’t have these qualifications they’re screened
from the selection process.
• Negotiation. Negotiation is the process of the buyer and the seller giving and taking components of the work,
the deliverables, the pay, and the schedule to reach an agreeable conclusion for both parties. Negotiations are
often handled by a buyer’s agent or purchasing agent on behalf of the project manager.
• Seller rating systems. Many organizations utilize a seller rating system. This is a database where project
managers can rate their experience with vendors they’ve utilized in the past. Other project managers can use
the database as a precursor to negotiations and awarding the project contract.

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Controlling procurements is the process of ensuring that both the buyer and the seller live up to the agreements
in the contract. The project manager and the contract administrator must work together to make certain the seller
meets its obligations, just as the vendor will ensure that the buyer lives up to its agreements as well. If either party
does not fulfill its contractual requirements, legal remedies may ultimately be pursued.

A deal is a deal and this lecture will the project manager ensure that both parties, the buyer and the seller, live up
to the terms of the contract.

• Creating a contract change control system


• Completing a performance review
• Paying the vendor
• Managing claims
• Creating a records management system

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Once the buyer and the seller have reached an agreement a contract is entered into by both parties. A contract is
a legally-binding agreement between the two parties and is backed by the United States court system. Both parties
are expected to live up to their agreement, otherwise claims, mediation, or even arbitration ensues. Most contracts
have provisions for how issues are escalated and if necessary into what court system.

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Contract closure is analogous to administrative closure. Its purpose is to confirm that the obligations of the
contract were met as expected. The project manager, the customer, key stakeholders, and, in some instances, the
seller, may finalize product verification together to confirm that the contract has been completed.

Once the vendor has completed their obligations to the contract the contract and procurement process can be
closed. This lecture covers:

• Auditing the procurement process


• Closing the contract
• Updating the organizational assets

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586
587
Stakeholder identification should happen as early as possible in the project. If you wait too long to properly
identify the stakeholders, you may end up missing decisions and requirements that will only cause the project
to stall, you could possibly create bad relationships with the stakeholders, and perhaps cause turmoil within the
project. Stakeholder identification is a project initiating activity and requires the project manager, the project
team, and other stakeholders to help identify who should be involved in the project. As you identify stakeholders,
you’ll classify them according to their power, influence, interests, and other characteristics so as to help you better
manage the project and control stakeholder engagement. Stakeholder identification should happen as early as
possible in the project. This lecture will help you determine how to best to:

• Performing stakeholder analysis


• Relying on expert judgment
• Creating the stakeholder register

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590
591
“Our greatest fear should not be
of failure … but of succeeding
at things in life that don’t really
matter.”
– Francis Chan

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Stakeholder management planning helps the project manager develop a strategy to best manage the project
stakeholders. This lecture defines:

• Hosting a stakeholder meeting


• Determining stakeholder influence
• Identifying stakeholder types
• Creating the Stakeholder Management Plan

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597
598
599
600
601
As a project manager, you’ll constantly work to engage the project stakeholders. You want to keep stakeholders
involved and excited about the project. That’s what this lecture is all about:

• Communicating with project stakeholders


• Relying on interpersonal skills
• Utilizing management skills for engagement
• Updating the project documents

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Stakeholder management is a new knowledge area in the PMBOK Guide, Fifth Edition. Controlling stakeholder
engagement means you’re controlling the stakeholder engagement throughout the project.
• Implementing a reporting system
• Maintaining stakeholder involvement
• Resolving stakeholder issues

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608
609
610
The PMI Code of Ethics and Professional Responsibility is about ethics, truth, and honesty. This document is
also part of your PMI Exam application process. You are required to read this document and agree to its terms as
part of your testing application.

During the PMP exam, you’ll be tested on these concepts:

• Complying with rules and policies


• Being an honest project manager
• Advancing the profession
• Enforcing truth and honesty
• Eliminating inappropriate actions

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612
613
614
615
616
617
“We become what we think
about most of the time, and
that’s the strangest secret.”
– Earl Nightingale

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WBS Facts Project Selection Methods
The WBS is a deliverables-based Scoring Models Net Present Value
decomposition of the project scope. Also known as weighted scoring This formula finds the present
Some activities are allowed in the models, these use a common set value on the project for each year
WBS (for example, testing). of values to “score” each project’s the project promises a return:
The WBS can be based on a pre- worthiness. 1. Each time period’s promised
vious project and this is a called Benefit-Cost Ratios return is calculated into pres-
a WBS template, also written as ent value.
(BCRs)
WBT. 2. Sum all of the time periods’
The WBS is needed for five project This model compares benefits present value.
management activities: to costs. Consider a BCR of 4:1
3. Subtract the project’s original
versus another project of 2:5.
1. Defining project activities investment from the sum.
2. Cost estimating Future Value(FV) 4. An NPV greater than one is
3. Cost budgeting How much is the Present Value good, less than one is bad.
4. Identifying the project risks (PV) worth in the future?
5. Qualitative risk analysis Constrained
FV=PV(1+i)n where:
Scope baseline is comprised of the
Optimization Methods
FV is the value to be determined Complex formulas to determine a
project scope statement, the WBS,
project’s worthiness to be select-
and the WBS Dictionary. PV is the current investment
ed. Examples include:
Chart of accounts is an account- i is the interest rate
ing system to track project costs by • Linear programming
n is the number of time periods
category (labor, specific materials, • Nonlinear programming
contractor rates). A project’s chart of Present Value • Integer algorithms
accounts works with the organiza- How much will a future value be • Dynamic programming
tion’s chart of accounts for specific worth in today’s dollars?
deliverables, work, and/or materials.
• Multiobjective programming
PV=FV/(1+i)n where:
Code of accounts is a numbering Project Purpose
system to identify the deliverables PV is the value to be determined Projects are chartered to give the
down to the work package within a FV is the promised return on project manager the authority to
WBS. The PMBOK® Guide uses a investment act on behalf of the project spon-
type of code of accounts: 5.3.3.2. sor or customer.
i is the interest rate
The WBS dictionary defines all of Projects are chartered to solve a
the project deliverables, resources, n is the number of time periods
problem or seize an opportunity.
cost and time estimates, and as-
sociated information for each work
Project selection is part of an organization’s portfolio management process.
package.

Managing the Project Change Control Components


All changes must be documented and
Project Management Information System entered into the PMIS. There are four
change control systems (CCS). Scope
changes go on to the configuration
management system for features and
Scope Schedule Cost Contract functions documentation. All changes pass
through integrated change control. The
CCS CCS CCS CCS relevant project components are updated
based on the change that has occurred.

Configuration Integrated Change Control


Management
System Product Project WBS Project
(Only scope changes) WBS
Scope Scope Dictionary Plan
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How to Calculate Float
Complete the Forward Pass
1. The Early Start (ES) of the first task is one. The Early Finish (EF) is a task’s ES, plus the duration, minus one.
2. The ES of the next task(s) will be the EF for the previous activity, plus one.
3. The EF for the next task(s) equals its ES, plus the task duration, minus one.
4. Use caution with predecessor activities; the EF with the largest value is carried forward.
Complete the Backward Pass
1. Backward pass starts at the end of the PND. The Late Finish (LF) for the last activity in the PND equals its EF
value. The Late Start (LS) is calculated by subtracting the duration of the activity from its LF, plus one.
2. The next predecessor activity’s LF equals the LS of the successor activity minus one.
3. The LS is again calculated by subtracting the task’s duration from the task’s LF, plus one.
Calculate Float
1. To calculate float, the ES is subtracted from the LS and the EF is subtracted from the LF. The following
illustration shows a completed PND with the float exposed.

Duration
5 7
3
Float
ES EF B
4
1 4
8 10
3 2
11 12
Forward pass formula: A D
ES+du-1=EF
1 4 5 10
6 11 12
Backward pass formula:
LF-du+1=LS C Critical LS LF
5 10 Path

Time Facts Task Miscellaneous


Lag: Waiting time between activities
(positive time). Relationships Time Facts
Lead: Activities are moved closer Finish-to-start (FS): This Three-point estimate: This time
together or even overlap (negative relationship means Task A must estimate approach uses three
time). complete before Task B can factors to predict the duration
begin. This is the most common of each task. The formula
Crashing: Adding resources to relationship. is (optimistic + most likely +
reduce the project duration. This
Start-to-start (SS): This relationship pessimistic) divided by three. It
adds costs to the project.
means Task A must start before Task is an average of the three time
Fast tracking: Allows project factors for each activity.
B can start. This relationship allows
phases to overlap to reduce the both activities to happen in tandem. PERT (Program Evaluation
project duration. This adds risk to
Finish-to-finish (FF): This and Review Technique): This
the project.
relationship means Task A must approach is weighted on the most
Free float: The amount of time likely estimate. The formula is the
complete before Task B does.
an activity can be delayed without optimistic, plus four times the most
Ideally, two tasks must finish at
delaying the next activity’s start date. likely, plus the pessimistic; this
exactly the same time, but this is not
Total float: The amount of time always the case. sum is then divided by six. I like to
an activity can be delayed without write this as (O + (4ML) + P)/6.
Start-to-finish (SF): This
delaying the project’s end date. relationship is unusual and is Critical chain: Network
Float: An opportunity to delay an rarely used. It requires Task A to diagramming approach based on
activity. Also called slack. start so that Task B may finish. It the availability of project resources
is also known as just-in-time (JIT) to determine project completion.
scheduling. Uses buffers (feeding buffers) of
time instead of project float.

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Earned Value Management
Name Formula Mnemonic Device
Planned Value % planned completion Please
Earned Value % complete x BAC Eat
Cost Variance CV=EV-AC Carl’s
Schedule Variance SV=EV-PV Sugar
Cost Performance Index CPI=EV/AC Candy
Schedule Performance Index SPI=EV/PV S (this and the next two spell SEE)
Estimate at Completion EAC=BAC/CPI E
Estimate to Complete ETC=EAC-AC E
To-Complete Performance (BAC-EV)/(BAC-AC) The
Index (Using BAC)
To-Complete Performance (BAC-EV)/(EAC-AC) Taffy
Index (Using EAC)
Variance at Completion VAC=BAC-EAC Violin

BAC=$100,000
Total Project
Estimate Types
Rough order of magnitude: Simple,
25% Month 6 early estimate. Range of variance is
Complete =50% -25% to +75% for the project
completion.
Budget estimate: Early planning
estimate and/or top-down approach.
Earned Value Actual Costs Planned Value Range of variance is -10% to +25% for
%COMP x BAC How much What the project should be worth the project completion.
$25,000 was spent? at this point in the schedule
$27,000 $50,000 Definitive estimate: Most accurate
estimate, but takes longest to
Five EVM Rules to Memorize complete; uses the bottom-up
approach. Range of variance is -5% to
1. Always start with earned value.
+10% for the project completion.
2. Variance means subtraction.
Bottom-up: Requires a WBS and
3. Indexes are “something” divided by “something” and they show
accounts for each work package.
performance for the project objectives.
4. When it comes to any index, the closer to 1 the better. Analogous: Creates an analogy
between projects; also known as a top-
5. Variances can be positive or negative. down estimate.

Project Cost Types Parametric: Uses a parameter (cost


per ton, cost per unit) for the estimate.
Variable costs: The cost of the deliverable, service, or materials can
fluctuate based on varying factors. Quality Costs
Fixed costs: A constant “fixed” cost throughout the project. Cost of quality is the cost to achieve
the expected quality on a project. Con-
Indirect costs: An expense that can be shared with other projects or the
sider training, safety, and materials.
organization, such as rent, phone, or equipment.
Cost of poor quality, also known as
Direct costs: Costs that are directly tied to the project.
the cost of nonconformance to quality,
Sunk costs are monies that have been invested into a project. Sunk costs is the cost of not achieving quality: re-
are gone, they are “sunk” into a project. work, loss of life or limb, loss of sales.
An opportunity cost is the amount of an opportunity that is given up.
Consider: Project A is worth $55,000 and Project B is worth $89,000,
you’d choose Project B to do. The opportunity is $55,000—the amount of Don’t change your answers. Most people
Project A that you can’t do because of the opportunity of Project B. change correct answers to wrong answers.
624
Project Management Charts and Values
Run Chart Pareto Chart

500
100%

Total Failures
250 75%

-500 Date of measurement 50%


215
Au Au Au Au Au Au Au Au Au Au Au Au Au Au Au
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
190
Series 1 -28 270 -285 260 -302 -300 220 405 300 272 200 255 230 265 201
123 25%
Units created

Control Chart 50 10%


Rule of Seven
Nonrandom Identified Categories of Failures

Normal Distribution
Requirements
Control Limits
Mean
Mean

Relative Frequency
Assignable
Causes
Out of Control

Cause-and-Effect Chart
Also Called Fishbone and Ishikawa Chart

Major Causes -3 -2 -1 0 1 2 3
Sigma Values Standard Deviation
+/- 1 Sigma = 68.26% (P-O)/6
Effect:
Problem to +/- 2 Sigma = 95.46% P=Pessimistic
Be Solved O=Optimistic
+/- 3 Sigma = 99.73%
+/- 6 Sigma = 99.99%

Hard questions and easy questions are worth


the same: one point. Don’t spend too much
Contributing
Causes
time laboring over a question. Choose an
answer, mark it for review, and then move on.

Quality Facts
Quality is a conformance to requirements and a fitness for Quality control is an inspection-driven process to keep
use. It is fulfilling the project scope. mistakes from entering the customers’ hands.

Grade is a category or rank given to entities having the Scope creep is the addition of small, undocumented
same functional use but different technical characteristics. changes that bypass the scope change control system.
Scope creep is sometimes called project poison.
Gold plating is the process of adding extra features to
drive up costs and consume the budget. A scatter diagram is like a run chart, but it instead
tracks the relationship between two variables. The two
Quality assurance is a prevention-driven process to do the variables are considered related the closer they track
project work right the first time. against a diagonal line. Consider the relationship of
costs and schedule.
625
Project Management Professional Theories
Maslow’s Hierarchy of Needs Parkinson’s Law
Maslow believed that we have five needs; we’re on a Individuals allow their work to consume all of their time.
quest to satisfy these needs. The needs are, from the Work will expand to fill the amount of time allotted to it.
bottom up:
McGregor’s X and Y
Physiological. We need air, food, clothing, and shelter. Management’s perspective of employees. X people are
Safety. We need safety and security. bad, lazy, and need to be micromanaged. Y people are self-
Social. We need friends, approval, and love. directed. Most managers have X and Y attributes.
Esteem. We need respect, appreciation, and approval.
Self-actualization. We need personal growth, Ouchi’s Theory Z
knowledge, and fulfillment. Workers do well if motivated. This provides participative
management, familial work environment, and lifelong
employment. Known as Japanese Management Style.
Herzberg’s Theory of Motivation
There are hygiene agents and motivating agents. McClelland’s Theory of Needs
Hygiene agents are expectations for employment: Needs are acquired over time and are shaped by life
paycheck, insurance, safe working environment. experiences. Our needs are categorized as achievement,
Motivating agents are motivators for employees such affiliation, and power. McClelland used a Thematic
as bonuses, career advancement, opportunity to grow. Apperception Test (TAT) to determine an individual’s needs.
Hygiene agents will not motivate, but their absence will
demotivate. Vroom’s Expectancy Theory
People behave based on what they believe (expect) their
Halo Effect behavior to bring them.
All opinions are formed by one component. A great
engineer doesn’t always make a great project manager.

PMI HR Terms Project Manager Powers


Role: This person is accountable by the title they Expert: The authority of the project manager comes from
possess (network engineer, business analyst). experience with the technology the project focuses on.
Responsibility: The owner of the assigned work is Reward: The project manager has the authority to reward
accountable for the work. the project team.
Authority: Based on organizational structure; Formal: The project manager has been assigned by senior
autonomy to make decisions, approvals, and manage management and is in charge of the project. Also known as
resources. positional power.
Stakeholder Identification Coercive: The project manager has the authority to dis-
Stakeholder analysis: This is a three-step process of cipline the project team members. This is also known as
identifying the project stakeholders early in the project, “penalty power.”
identify the impact/support of each stakeholder, and then Referent: The project team personally knows the project
plan how to influence stakeholders to act in given situa- manager. Referent can also mean the project manager
tions. refers to the person who assigned him the position.
Stakeholder register: Documents stakeholder identifica-
tion, assessment of influence, and stakeholder type. Conflict Management
Stakeholder classification models: These are grids to Problem solving: Both parties work together for the good
plot out stakeholder power, influence, and interest in the of the project in a spirit of problem solving. Also known as
project. Here are four common models: confronting. This is a win-win solution.
Power/interest grid - how much power/interest do the Compromising: Both parties give up something, often in a
stakeholders have? heated scenario. This is a lose-lose solution.
Power/influence grid - how much power/influence do Forcing: One party quickly forces their solution over anoth-
the stakeholders have? er. Often done by seniority. This is a win-lose solution.
Influence/impact grid - how much influence (involve- Withdrawal (also known as avoidance): One party
ment of decisions) and impact on project change do leaves the discussion. This is a yield-lose solution.
the stakeholders have? Smoothing: The differences of the problem are down-
Salience model - classifies stakeholders based on played. This is a delay and is a lose-lose solution.
power, urgency, and legitimacy for the project.
Be careful who sees the stakeholder management strategy because it may contain sensitive information.

626
Project Communications Management Facts
Communication channels formula: N(N-1)/2, where Active listening: participating in the conversation
N represents the number of stakeholders. through verbal and nonverbal signs of message
55% of communication is nonverbal. receipt.

Paralingual: the pitch, tone, inflection of the speaker Messages are transmitted; knowledge is
that affects the content of the message. transferred.

Effective listening: watching the speaker’s body Acknowledgment of a message doesn’t mean
language, interpreting paralingual clues, asking acceptance of the message.
questions for clarity, and offering feedback.

Communications Model The sender sends the message


and it is encoded. The medium
transfers the message. The
decoder decodes the message
Sender Receiver for the receiver. Noise on the
medium could interfere with
the message. Barriers prevent
communication from happening. An
acknowledgment of the message
Encoder Medium Decoder doesn’t mean agreement with the
message. Communication happens
Noise when information is transferred.

Risk Responses Risk Terms


Avoidance: Avoid the risk. Contingency fund: An amount of Business risk: Risks that can offer
Mitigation: Reduce the probability or funds used to offset a project’s risks. an upside or a downside (both
impact of the risk event. Secondary risks: A risk response positive and/or negative impacts). .

Acceptance: The risk may be small creates another risk. Qualitative analysis: Qualifying the
so the risk may be accepted. Residual risks: A risk response may risks for their legitimacy. This is a
create small generally accepted risks. very quick, subjective approach.
Transference: The ownership of the
risk is transferred to some other party, Triggers: Condition, event, or warning Quantitative analysis: Quantifies
usually for a fee. sign that a risk is about to happen. the risk exposure based on
Usually “triggers” a risk response. evidence, research, and in-depth
Exploit: A positive risk that a project analysis of the risk events.
wants to take advantage of. Positive risk: Risks with a positive
impact. Utility function: A person’s or
Share: A positive risk that can be organization’s willingness to accept
shared with the organization or other Negative risks: Risks with a negative risk.
projects. impact. Relative to the project priority as
Enhance: A response that ensures Pure risk: Only offers a negative high-priority projects are typically
that a positive risk will likely happen. impact (injury, fire, theft, destruction). risk adverse. Also known as risk
tolerance.

Quantitative Risk Matrix


Risk Probability Impact Ex$V The risks are identified and record-
ed in the risk register. The
A .60 -$10,000 -$6,000 probability of each risk is found
B .20 -25,000 -5,000 as is the risk impact. The
probability times the impact equates
C .40 -40,000 -16,000 to the Expected Monetary Value
(Ex$V). Some risks can have a pos-
D .10 35,000 3,500
itive impact. The sum of the Ex$V
Risk exposure -$23,500 is the risk exposure. The positive
opposite of the risk exposure is the
Contingency reserve $23,500 amount needed for the contingency
reserve.
627
Procurement Procurement Process
Terms Buyer
Contracts: An offer and consideration.
SOW Sellers Bidder
Contracts are backed by the court Conference
system. • IFB
Cost reimbursable contracts: Risk • RFQ
is with the buyer as the buyer pays for • RFP
cost overruns. SOW Updates
Fixed-price (lump-sum contracts):
Risk is with the seller as seller pays for
The buyer creates a statement of
cost overruns.
work (SOW) with an invitation for
Time and materials contract: Buyer
Sellers Seller
bid (IFB), request for quote (RFQ),
pays for the time and materials of the Responses or request for proposal (RFP) for
vendor. Must have a not-to-exceed • Bid the vendors.(IFBs and RFQs both
(NTE) clause. • Quote want just a price; a proposal wants
Purchase order: A unilateral form of a • Proposal ideas.)
contract.
A bidder conference allows sellers
Letter of intent: The buyer tells the to ask questions about the SOW.
vendor they intend to do business with The buyer may create an updated
them; not a binding agreement. Buyer Seller SOW to give back to the sellers that
Letter contract: Generally short-term Selection attended the bidder conference.
purchase used as a stopgap or emer-
Sellers respond with a bid, quote,
gency response. Contract or proposal. The buyer completes
Bidder conference: Vendors all meet seller selection and creates a con-
with the buyer to discuss the details tract.
of the statement of work so they may
Decentralized contracting is done by the PM; centralized contracting
prepare a bid, quote, or proposal.
is done with a purchasing agent or through a central procurement office.

Organizational Structures
Projectized Balanced Matrix Functional
• PM has the most authority. • PM and functional managers bal- • PM has little authority.
• Team is typically assigned to the ance power. • Organization is structured by
project full-time. • Power struggles are common. departments or functions (sales,
• Competition between teams may Internal competition may increase manufacturing, IT, etc.).
hurt the organization. for resources. • PM may be called a project
• Team is uncertain of future work • Project team members are on coordinator or expeditor.
after the project is completed. multiple projects. • The functional manager has all
• PM is full-time and has • PM is full-time and has part-time of the authority.
full-time administrative staffing. administrative staffing. • Focus is on completing the proj-
ect work along with day-to-day
Strong Matrix Weak Matrix work.
• PM has strong authority. • PM has less power than functional • PM is part-time and has part-
managers. time administrative staffing.
• Typical full-time resources from
functional departments. • Internal competition may increase
for resources. Projectized
• Internal competition may increase
for resources. • Project team members are on
er

multiple projects.
• Project team members are on
w

• PM is part-time and has part-time


Po

multiple projects. Matrixes


t

administrative staffing.
c

• PM is full-time and has full-time


je
ro

administrative staffing.
P

Organizational structure affects questions; pay attention to who has the power. Functional

628
47 Processes and 10 Knowledge Areas
Process Groups
Knowledge
Areas Initiating - 2 Planning - 24 Executing - 8 M&C - 11 Closing - 2
Project Develop project Develop Direct and Monitor and Close project or
Integration charter project manage project control project phase
Management management work work
plan Integrated
change control
Project Plan scope Validate scope
Scope management Control scope
Management Collect
requirements
Define scope
Create WBS

Spend time on Initiating, Executing, and Closing. There are few processes, but many questions. Work smart, not hard.
Project Plan schedule Control schedule
Time management
Management Define activities
Sequence
activities
Estimate activity
resources
Estimate activity
durations
Develop
schedule

Project Plan cost Control costs


Cost management
Management Estimate costs
Determine budget
Project Plan quality Quality Control quality
Quality management assurance
Management
Project Plan HR Acquire team
HR management Develop team
Management
Manage team
Project Communications Manage Control
Communication planning communications communications
Management
Project Plan risk Control risks
Risk management
Management Identify risk
Perform
qualitative risk
analysis
Perform
quantitative
risk analysis
Plan risk
responses
Project Plan Conduct Control Close
Procurement procurement procurements procurements procurements
Management management
Project Identify Plan stakeholder Manage Control
Stakeholder stakeholders management stakeholder stakeholder
Management engagement engagement
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PMI Registered Education Provider #4082

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